When Michael Burry publicly declared Nebius Group a “fish in a barrel,” he didn’t just make a contrarian statement — he lit a fuse under a stock that had been one of 2026’s most spectacular performers. The disclosure of his short position, established at $211.77 per share, has transformed what should have been a routine earnings week into a high-stakes referendum on how AI infrastructure companies account for their most critical assets.
The market’s reaction was immediate and brutal. News of Burry’s bet sent the Nasdaq-listed shares down roughly 10 percent on August 6, settling near $197, and the selling pressure has yet to fully abate. By Friday’s close, the stock had slipped another 1.49 percent to €162.56 on the German market, leaving it 37.72 percent below the record high it touched in June. For all the recent damage, however, the equity still shows a year-to-date gain of 121.17 percent — a reminder of just how far the AI infrastructure rally had carried it before the tide turned.
Burry’s Accounting Argument
Burry’s thesis cuts to the heart of how Nebius and its peers report earnings. His contention: AI infrastructure companies are inflating their profits by depreciating graphics processing units too slowly. In Oracle’s case, he estimates earnings could be overstated by 26 to 27 percent by 2028. The implication for Nebius, which runs a GPU-heavy business model, is that reported profitability may not reflect economic reality.
That argument has landed with particular force because Nebius was already in the middle of a volatile stretch. July brought a 31.1 percent decline, and the stock has been wrestling with a series of concerns that extend well beyond Burry’s positioning. Insider sales have added to the unease — executives disposed of roughly $137 million worth of shares over the past 90 days, a pattern that skeptics read as a warning sign even if such moves are common among fast-growing companies.
A Growth Story That Demands Capital
The fundamental picture, though, remains one of explosive expansion. First-quarter revenue hit $399 million, a 684 percent surge from the $50 million posted a year earlier, with the core AI infrastructure segment growing even faster at 841 percent to $390 million. Adjusted EBITDA reached $129.5 million on a 32 percent margin, though the company still recorded a net loss of $100.3 million.
That growth comes at a steep price. Nebius plowed $2.5 billion into graphics processors in the first quarter alone, part of a capital-intensive expansion that has required constant fundraising. The company raised $6.3 billion in fresh capital during Q1 — including a $2 billion investment from Nvidia — and ended the period with $9.3 billion in cash. A further $775 million in debt followed in mid-July. For the full year, management has lifted its capital expenditure guidance to $20–25 billion, up from a prior range of $16–20 billion, while projecting annual revenue of $3.0–3.4 billion.
Should investors sell immediately? Or is it worth buying Nebius?
The scale of those ambitions is visible in the company’s capacity plans. Nebius has raised its power capacity forecast from 1 gigawatt to over 4 gigawatts, underpinned by a five-year contract with Meta that could be worth up to $27 billion.
The Valuation Debate Intensifies
Whether the numbers justify the price tag remains the central question. On expected 2026 revenue, the stock trades at roughly 14 times sales — a dramatic premium to the sector average of 3.3 times. Based on trailing twelve-month revenue, the multiple stretches to about 55. The forward price-to-earnings ratio sits near 60, far above typical technology sector levels.
Wall Street’s analysts are deeply split on the stock. Northland Securities remains the most bullish with a $410 price target, while Morgan Stanley’s “Equal Weight” rating and $144 target represent the bearish end of the spectrum. Piper Sandler, DA Davidson, and BNP Paribas Exane sit in between with neutral stances. The consensus lands at “Moderate Buy” with an average target of $221.64, while model-based fair value estimates put the stock at $245.43.
What Wednesday’s Numbers Will Show
All of this sets the stage for Wednesday, when Nebius reports second-quarter results before the market opens. Analysts expect revenue of $578 million and a loss of $0.52 per share — a notable deterioration from the $0.23 loss that beat estimates in Q1. The company’s ability to confirm its upgraded capacity and revenue guidance could undercut Burry’s thesis; a wider-than-expected loss would give short-sellers fresh ammunition.
The earnings calendar this week is crowded — Rocket Lab reports Monday, Super Micro Computer Tuesday, and Cisco shares the day with Nebius — while July US inflation data adds a macro layer to the proceedings. Some investors, including Jordi Visser, argue the recent AI sell-off has run its course, pointing to GPU rental prices that have climbed as much as 60 percent in seven months as evidence of unbroken demand for computing power.
Whether that demand translates into a rebound for Nebius shares depends on how convincingly the company can answer its critics on Wednesday. The stock’s journey from one of the year’s biggest winners to the center of a very public short-selling dispute has been swift — and the next chapter is only days away.
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